LINCOLN, Neb. (DTN) -- The state of North Dakota has asked a federal bankruptcy court in Nebraska to lift an automatic stay in the Chapter 11 bankruptcy case of Hansen-Mueller Co., in order to conduct a state administrative solvency proceeding against the company.
The North Dakota Department of Agriculture filed the motion in the U.S. Bankruptcy Court in Nebraska this week and asked to be allowed to recover $778,000 from a surety bond and to deposit the funds into a trust fund to be administered by the North Dakota agriculture commissioner.
In addition, the state is planning to make distributions from the credit-sale indemnity fund, which is a separate state-controlled fund to holders of unpaid credit-sale contracts with Hansen-Mueller.
The state argues both the surety bond and the indemnity fund are not property of the bankruptcy estate because Hansen-Mueller has no ownership interest in them.
They exist solely by state law to protect grain sellers and are outside the court's jurisdiction, the state said in the motion.
Based on court records, there are 41 unsecured creditors of Hansen-Mueller in North Dakota.